Decision no. ... in the matter of fixing reasonable fees for attorneys or agents under the authority of Section 9 of the...

UNIV. OF FL LIU.
jUMENT: DEPT.



U.S. DEPOUITOfRY



THE AMERICAN COMMISSIONER

MIXED CLAIMS COMMISSION

UNITED STATES AND GERMANY


DECISION NO. 17
IN THE MATTER OF
1XING REASONABLE FEES FOR ATTORNEYS OR
AGENTS UNDER THE AUTHORITY OF SECTION 9 OF
THE "SETTLEMENT OF WAR CLAIMS ACT OF 1928"


DOCKET NO. 6120


OagaZ Bell, Alverda S. Elsey, Samuel J. Furni8s, Harlan E. Goodell,
and Francis J. McDonald, Claimants

Frank M. Jones, Attorney


CHANDLER P. ANDERSON,
American Commissioner
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MIXED CLAIMS COMMISSION, UNITED STATES AND GERMAWx'

Established in pursuance of the Agreement between the "
United States and Germany of August 10, 1922



CHANDLER P. ANDERSON
American Commissioner















..
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THE AMERICAN COMMISSIONER

MIXED CLAIMS COMMISSION

UNITED STATES AND GERMANY


DECISION NO. 17
IN THE MATTER OF
FIXING REASONABLE FEES FOR ATTORNEYS OR
AGENTS UNDER THE AUTHORITY OF SECTION 9 OF
THE SETTLEMENT OF WAR CLAIMS ACT OF 1928 "


DOCKET NO. 6120


Oscar Bell, Alverda S. Elzey, Samuel J. Furniss, Harlan E. Goodell,
and Francis J. McDonald, claimants
Frank M. Jones, Attorney



The above-named claimants have each duly filed with the American
Commissioner a written request that he fix a reasonable fee to be paid
by them to their attorney, Frank M. Jones, of Georgetown, Delaware,
as compensation for whatever services have been rendered by him on
behalf of and with the authority of the claimants, such services be-
ing of the character described in the provisions of Section 9 of the
." Settlement of War Claims Act of 1928."
:: The claimants have objected to the amount of the fee asked by
the attorney on the ground that it is excessive, and the attorney has
been notified of the filing by the claimants of the requests that a
t reasonable fee be fixed. The attorney, in response to a request by
i the American Commissioner, has fiWed with him an affidavit giving
.JF 26524-28 (117)






118
the information which he desires to have considered by the Commis-
sioner as showing the reasonableness of the fee asked, which informsaI
tion has been brought to the attention of the claimants, who have::
each filed an affidavit in reply, copies of which affidavits have beeaiiI
communicated to the attorney.
The award in this case was made on April 21, 1926, and representspf
the net damages, as ascertained by this Commission, suffered by the i:
owners of the schooner "Laura C. Anderson," as the result of iti:.s
destruction by a German submarine on August 29, 1917. The claim -:
ants' interests in this vessel were, respectively: Oscar Bell, 1/128th. 3
share, amounting to $742.50; Alverda S. Elzey, 1/64th share, amount-.
ing to $1,485.00; Samuel J. Furniss, 1/64th share, amounting tol.
$1,485.00; Harlan E. Goodell, 1/64th share, amounting to $1,485.00, I
and Francis J. McDonaJd, 4/64ths share, amounting to $5,940,00,.OO
with interest on each item at the rate of five per cent per annum fromll
November 11, 1918, to the date of payment. :|
The managing owner of this vessel was William J. Quillin, who
entered into a written agreement with this attorney on December 23, -3
1922, employing him on behalf of all the owners of this schooner to j
prosecute and collect their claim against the German Government 'I
before this Commission, and providing that his compensation for ;
such services would be a contingent fee of 331/ per cent of the.*3
amount recovered, but in case no recovery was had that the owners 0
were not to pay any compensation or costs or expenses. In any
event, all disbursements were to be paid by the attorney in the first .
instance.
Subsequently, in April and May, 1924, twenty-seven out of the.-:
thirty-one owners of this schooner, representing 93/128th shares,)
executed powers of attorney to the managing owner, who himself '.
owned 11/128th shares, conferring upon him full power to act
their attorney in the prosecution of this claim, with power to stiub''
stitute another attorney in his place. Thereafter, on September 4.
1924, the managing owner executed two powers of attorney to Fraui,
M. Jones, one substituting him as the attorney for the above mznidii"
tioned twenty-seven owners, and the other conferring upon him fuRl
power to act as the attorney for the managing owner personal|i:f'
The said attorney, therefore, represented before this Commissi-*





119
twenty-eight of the thirty-one owners, or 52/64th shares in the
schooner "Laura C. Anderson."
It also appears from the attorney's affidavit that, "There were
W thirty one joint owners of this schooner at the time it was sunk, all
of whom, except three, have been represented by me from the
institution of the proceedings to the present time. All of these,
except the five who are interested in these proceedings and one other,
A. D. Cummins, have agreed in writing that I should have 25%
of the gross amount awarded to each of them."
It appears from the information furnished in this proceeding
that the attorney has endeavored to effect an adjustment of his fee
satisfactory to all the claimants.
After the award was made, he wrote, on May 21, 1928, to each of
the claimants represented by him in this case, as follows:

As to the matter of my fee for services in connection with the award, some
H of the owners have objected to the amount agreed upon by Capt. Quillin
and me in 19224 before I took up the work, namely 33%%, stating that they
feel that that percentage is too high. After giving the matter considerable
thought, I have concluded that perhaps I should make a reduction in the
amount and have decided to make the percentage 25% instead of 33'%%.
The attorney further stated in his letter to these claimants:
Under the law, you are not obliged to agree to this or any other amount,
but may have the amount of my fee fixed by the Mixed Claims Commission, If
you so desire, as I have already written you. If, however, you decide not to
agree to the 25%, herein suggested, and desire the amount of fee to be fixed
by the Mixed Claims Commission, of course, you will understand that my
offer to accept the 25% would, in that case, be withdrawn and I should appear
before the Commission insisting upon the full 331% provided for in my contract
with Capt. Quillin.
It further appears from the attorney's affidavit that after writing
to the claimants, as above noted, he conferred with six of the claim-
ants, who are not parties to this proceeding, respecting his fee. He
states that, In this conference these parties suggested that I should
make a still further reduction of my fee below the 25% offered by
me; and we finally mutually agreed that my fee in their cases should
be 20% of the gross award in each case. In the meantime, I had
taken the question of my fee up with the other claimants, suggesting
that my fee be 25% of the gross award in each case, and eventually






120 .

all the other joint owners, except the five interested in this appui lj
tion, and except also the said A. D. Cummins, agreed in writi. ....
that I should have a fee of 25% in each case." -*
It further appears that after making the agreement with the six
claimants, above mentioned, reducing to twenty per cent the fee to .tlI
paid by them, he again conferred with them, and stated, as set on:liKM
in his affidavit, that "I did not think it fair for me to accept 20%1i
from them and 25% from all the others; and that if they insisted::::
upon the 20% I should feel obliged to deduct 5% more from each of":i"
the other cases, notwithstanding the fact that all of them were sati*-:
fled with a fee of 25%. As a result of this interview each of these:
parties agreed in writing that my fee in their cases should be mad ii
25% the same as that agreed upon by all the others." He adds:ii
"Agreements have been reached, therefore, between each of thbe'i
claimants whom I represent (except the five interested in this appli- :
cation, and also except the said A. D. Cummins), and myself that::
my fee in each case shall be 25% of the gross award." .,
As to the claimant A. D. Cummins, above referred to, it appearsa-I
from the attorney's affidavit that because of actions brought by,:::
various creditors against Mr. Cummins this attorney agreed with.,:
the attorneys representing those creditors and Mr. Cummins to a
compromise adjustment of his fee to be paid out of the award to Mr...
Cummins in this case. The compromise amount agreed upon was:
$2,750, or approximately 151/2 per cent of the amount received by4.
Mr. Cummins. .;
The circumstances and conditions presented, and the characteri:
and value of the services rendered in this case are substantially tl. j'
same as those considered in a similar proceeding in which the Ameri-,
can Commissioner has recently rendered a decision (Decision No. 10),
to which reference is here made, because substantially the sana0.:|
conclusions must necessarily follow in this case.
The services rendered by the attorney in this case include a veryrt
considerable amount of time and work in proving the Americl.W
nationality of each individual share in the claim, and, as pointed o00,`i
in Decision No. 10, although this proof as to each shareholder w.0
primarily for the benefit of eath shareholder individually, nev!*i
theless, such services were indirectly and essentially of apprecia.:,



*t! :d
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121
| benefit to all the other shareholders as well, and must be taken into
consideration in fixing the fee to be paid by each of these claimants.
6': Again in this case, as in the cases dealt with in Decision No. 10, the
I attorney is entitled to the credit of securing a substantial increase
in the valuation of the vessel, as finally fixed by the Commission, over
and above the valuation first recommended by the two expert
appraisers appointed by the Commission.
The valuation recommended by the appraisers was -------------------__________ $77,000
The valuation on which the award is based wa-------------------- 120,000
The attorney's services in securing this increased valuation are all
the more to his credit because the question of the value of this vessel
had been seriously prejudiced by the action of one of the other share-
holders, who, apparently without authority, represented himself to
be the managing owner of this vessel, and, as such, filed with this
Commission a separate claim in which he placed the value of the
vessel at only $80,000 at the time of her loss.
The valuation of $120,000, on which the award was based, accord-
ingly, represents a gain of $43,000 to the shareholders over the ex-
perts' valuation, and a gain of $40,000 over the valuation proposed in
the conflicting claim filed by the other shareholder. This increased
value inured to the benefit of the owners, although the damages
awarded to them for the loss of the vessel were reduced to $95,048
on account of a credit required by reason of War Risk Insurance
collected.
It appears, therefore, that all of the claimants in this case, in-
eluding those who were not represented by this attorney as well as
those who were represented by him, derived a pro rata benefit from
the increase in the valuation of the vessel, which was secured by
him, in proportion to the respective interest of each claimant in the
vessel. An increase of $43,000 in the total valuation of the vessel
represents an increase of about $671 for each sixty-fourth share in
Sthe vessel. The total award valuation of $95,048 for the vessel rep-
. resents a value of about $1,485 for each sixty-fourth share, which is
the basis for the computation of the attorney's twenty-five per
cent fee.
On these figures, twenty-five per cent of the amount actually
a :'awarded for each share is equal to $371.25, and, accordingly, the fee
i asked by the attorney from each shareholder is only approximately
fifty-five per cent of the increased valuation, shown above, of $671
'
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122

per share, which was added through the efforts of this attorney. Ti!:h|
same proportion prevails between the fee asked by the attorney ail,
the amount received by the claimants, if the computation is based :.
on the amount awarded with interest added. .
It is also to be noted that in the cases dealt with in Decision No.i
10 the twenty per cent fee allowed to the attorneys represents Ia
larger proportion of the increase secured by them in the valuation E
of the vessels in those cases than the twenty-five per cent fee asked- !
for by this attorney bears to the increased valuation secured by him. .i
Moreover, the twenty per cent fee allowed in those cases for serv-n :|
ices, which were of no greater value to the claimants than those
rendered by this attorney in this case, actually results in a larger feei:.
than a twenty-five per cent fee would amount to in this case for
two reasons. In the first place, the total amount on which the at- .::
torneys' fee was to be computed in those cases was very much larger :
than the amount on which the twenty-five per cent fee in this case
would be computed, and, in the second place, the twenty-five pet
cent fee would be computed on only 52/64ths of the amount awarded, :
because 12/64ths shares in this case did not employ this attorney,
and, although they benefit equally with all of the other claimants as.
the result of the increased valuation of the vessel secured by his serv-
ices, they do not contribute to his compensation for such services.
There is one other point of difference to be noted between the situ-
ation in this case and in those cases which must be taken into con-'
sideration in valuing the attorney's services in this case. This dif-
ference is that, in addition to the services rendered in establishing
the value of the vessel and the American nationality of the claim t ::
each shareholder, an important and difficult question of law was ,
presented in this case which did not arise in those cases.
It appears from the record that War Risk Insurance had beet
secured, covering the schooner "Laura C. Anderson" on this voyages :|i
from the French Government in the total sum of Frcs. 348,000. At .:
the rate of exchange prevailing at the time the vessel was lost, this i:
insurance equalled in American money $60,409.32, whereas, at the
time this insurance was actually paid by the French Government,.
owing to the fall in the value of the franc meanwhile, it equalled, A
only $24,951.60. The German Agent and the American Agent dis- I
agreed as to which of these valuations should be adopted in makbig j
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123


the deduction for the insurance collected, the German Agent con-
tending for the former and the American Agent for the latter. This
question was discussed at considerable length between the two
Agencies, and also between the American Agency and the attorney
in this case. Briefs were filed by both sides. It appears that this
attorney participated to some extent in the preparation of the Ameri-
can briefs on this point. The question was finally submitted to the
Commission for decision, and the two National Commissioners also
disagreed. The question, accordingly, was finally certified to the
Umpire, who sustained the American contention in his decision.
This result added approximately $36,000 more to the amount awarded
in this case, for which this attorney is entitled to some of the credit.
The services rendered by this attorney on behalf of these claim-
ants extended through a period of upwards of five years, during
which, on account of the contingent character of the fee agreement,
he received no compensation, and there was always the possibility
that eventually no compensation would be received by him. More-
over, he was required to bear all the expenses involved in the presen-
tation and prosecution of this claim, and it is evident from the
information submitted by the attorney, and found in the files of this
Commission, that the expenses incurred by him amounted to a very
substantial sum.
Now, therefore, considering the character and extent and value
of the services rendered by the attorney, and that the payment of
his compensation was contingent upon securing and collecting an
award, and that the fee to be paid includes all disbursements and
expenses incurred by him, and in view of the considerations stated
in the general Jurisdictional and Administrative Decision rendered
by the American Commissioner under date of September 28, 1928,
and after careful examination and full consideration of the informa-
tion furnished in this proceeding by the attorney and the claimants,
and by the records of this Commission pertinent to the questions
involved, and after due deliberation thereon,
The American Commissioner decides and fixes as the reasonable
fee to be paid t6 the attorney, Frank M. Jones, by each of the claim-
ants, Oscar Bell, Alverda S. Elzey, Samuel J. Furniss, Harlan E.
Goodell, and Francis J. McDonald, the parties to this proceeding,
an amount equal to twenty-five per cent of the amount received by





124
each of these claimants, respectively, from the Treasury Department' .:
in payment of the award rendered on their behalf, said fees to li..!
paid by the said claimants and received by the attorney as f ,i ~
compensation for all services rendered in the prosecution and coll p-- -.
tion of these claims, as defined by Section 9 of the "Settlement ofl:!
War Claims Act of 1928."
Done at Washington, D. C., this 5th day of December, 1928.
CHANDLER P. ANDERSON,
American Com.missioner,
Mixed Claims Commission,
United States and Germany. .









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